Hundreds of people will gather in Parliament Square on Saturday, fill balloons with the substance – also known as laughing gas – and, as Big Ben strikes 3pm, simultaneously inhale.

They will inevitably collapse in fits of giggles, but their protest has a serious target: government plans to ban any mood-altering drugs that are not specifically exempt in a new law.

The psychoactive substances bill, which last week passed its third reading in the House of Lords, was introduced to counter the rise of so-called legal highs – designer drugs that contain chemicals that produce similar effects to illegal equivalents.

Stephen Reid, founder and director of the society, said the issue was one of cognitive liberty. “The position of the society is that actually people should be free to take whatever substances they see fit,” he told the Guardian. “We see it as a personal choice, of liberty. It’s not to say that some drugs don’t carry risks, but there’s a lot of things in society that are risky, for example, extreme sports, and no one’s talking about banning them.

“Nitrous oxide is one of the substances that would be banned under this legislation. If you listen to what the government is saying, it is talking about novel psychoactive substances. But nitrous oxide is not one of those, people have been using it for decades. Yet the government, with this very clumsy legislation, will try to stop people using it.

“It is actually one of the more popular psychoactive substances in the UK, after alcohol and cannabis, and there are a lot of members of the Psychedelic Society that thought this was a real affront to their liberty. They thought the government has really overstepped the mark by doing this.”

The psychoactive substances bill, introduced in the Queen’s speech, would make a criminal offence of supplying nitrous oxide and other psychoactive substances, except named exclusions such as alcohol and coffee. Anyone convicted could face seven years in prison, but possession would not be covered.

It is intended to shut down the trade in legal highs, which has exploded in recent years. But Reid said the law would only drive the sale and supply of the drugs underground.

“In Ireland [where a similar law was introduced in 2010] use of novel psychoactive substances has actually gone up, so there’s no evidence that this is going to make people safer,” he said. Legal-high use in Ireland has increased from 16% in 2011 to 22% in 2014, with use among people aged 16-24 the highest in the EU, according to recent research.

Reid added: “One of the substances, or classes of substances, people have been most worried about are these synthetic cannabinoids. In the Netherlands, where cannabis is legal, there is no market for these things. People are only getting hold of these things because cannabis is illegal.”

More than 1,500 people have signed up to a Facebook page advertising the nitrous oxide protest. They will gather at Parliament Square from 2pm. Shortly before 3pm, they will charge balloons with nitrous oxide. At 3pm, demonstrators will inhale. The drug brings a brief feeling of profound euphoria. Users sometimes black out, bursting into laughter as they come around.

On Tuesday, a London council pre-empted the nationwide ban when it announced a ban on using and supplying laughing gas across the borough. From 17 August, anyone caught breaching Lambeth’s new Public Spaces Protection Order could face a fine of up to £1,000.

Local authorities can come up with their own laws to tackle anti-social behaviour under the Anti-social Behaviour, Crime and Policing Act 2014. Lambeth’s cabinet member for neighbourhoods, Jane Edbrooke, said: “Legal highs are simply not safe – we saw that just days ago with the death of a teenager who had inhaled laughing gas.

“It is our duty to keep our residents safe and this new order should deter people from supplying and using legal highs in the borough. The litter and anti-social behaviour associated with certain legal highs has also blighted areas like Vauxhall and Clapham and now we have the power to do something about it.”

Reid conceded that there was evidence of harm from legal highs. But, he added: “The best solution in this case is to make cannabis and MDMA available through legally regulated outlets, along with the provision of realistic and quality drug education on how to use these substances safely.

“The fact is, most people enjoy using drugs, whether nitrous oxide, coffee or alcohol, and that careful legal regulation is the fairest and safest solution. Rather than follow the failed path of prohibition, the government should be looking to the United States, where cannabis is now entirely legal in four states, with many more soon to follow.”